Financial/Retirement Planning and HIV

[OneTampa]

I thought about listing this thread under the existing ones labeled Econony and Social Security but decided to start anew.

As many of you may have read, I recently posted results of a recent medical checkup that were wonderful, to say the least, after 23 years HIV+. As a Ms. Martha would say, "That's a good thing."

Now on to the "challenging thing". After working for an organization for over 27 years, losing the job and working as a consultant, I have been employed at my current organization for about a year (tailor made for me with good benefits and medical coverage). I have also developed a super heightened awareness of financial matters--as we all have-- given the current economic crisis.

I know many of us on this board are struggling on a number of fronts, including financially.  That is why I want to hang onto the few coins I have. An IRA CD will mature soon and I recently sought out a financial advisor (Edward Jones as they usually take a conservative approach to investments).

Nowadays I find myself periodically slipping into a state of high pitched anxiety about hanging on to my few coins and wonder whether they and I will be there when I am ready to retire--assuming the economy regains its positive vigor, I continue to enjoy good health and reach that retirement milestone 11 years from now.

I receive my yearly social security estimate and duly examine it.  I also discussed my retirement time horizon with the financial advisor.  He has a very warm and caring demeanor--yet I know its still a business. I have not informed him of my HIV status but did include a what if scenario regarding health concerns.  I've also done research on financial and retirement planning.  To top it off, I have an undergraduate business degree--so I am starting at least a little above scratch knowledge.  Yet, the depth of the current economic situation still pulls at the fear and dread parts of me with the  analytical part of me sometimes taking a back seat sighing with exasperation.

I guess what I am trying to inquire with my disjointed sentences above is, have any of you thought about your financial future--despite pressing daily concerns-- with the HIV component mixed in that pushes everything to a higher level of uncertainty?

Thank you in advance for your feedback.

[Buckmark]

Sure, I think about my financial future on a somewhat regular basis.  Moreso in times like these.  But I'm not  quite sure what your question or concern is.  Should folks with HIV be planning for their financial future?  Absolutely.  Are there any special considerations that HIV folks need to take into account?  I suppose that like anyone with a potentially terminal disease, you need to have your estate in order.  That means you need a will, to determine who will receive your assets.  A living will, that officially documents, to make your intentions known regarding life-prolonging medical procedures should you not be able to make those decisions (e.g. what measures you do / do not want taken).  Unless you are married (gay or straight), you probably need a durable power of attorney, to give someone the authority to make decisions for you should you become incapacitated.  This could be for authority for healthcare, finances, etc.

If you're asking about how much you should save, what investment vehicles you can / should be using, and what types of investments you should make, that depends on a lot of things such as:  your income, your tolerance for risk.  You should specifically ask any financial adviser if they receive any fees or commissions on any investments they recommend for you -- and get it in writing.  If they do, find another financial adviser.  A good financial adviser will take all this into account, especially your tolerance for risk.

Regards,

Henry

[SoSadTooBad]

OneTampa - I think about it a lot.  This market is not making anyone feel good about retirement, and we have one extra challenge.  I have put aside a fair amount of money, but it is nowhere near enough to sustain me as a retiree.  By far, my biggest worry is about maintaining health coverage - that seems like a herculean effort.  I do not see a path to a comfortable retirement without decent health coverage, especially when you consider the relative insolvency of Medicare.

I don't know the answer, other than more hard work, lots of saving and a ton of luck.  There is so little we can predict about the future, that it seems fruitless to go beyond that.

 

[madbrain]

Hi,

I guess what I am trying to inquire with my disjointed sentences above is, have any of you thought about your financial future--despite pressing daily concerns-- with the HIV component mixed in that pushes everything to a higher level of uncertainty?

Despite being only 32, I think about retirement a lot. A little bit less than I used to pre-HIV 2 years ago, but still a lot.

Social security is not really on my radar all that much, except for cursing about the lack of federal survivor benefits for my partner and I. My official social security full retirement date would be at age 67 in 2043, and first possible retirement date at 62 in 2038. Most experts say the social security will either go bankrupt by then, or the benefits will be reduced, or social security taxes will increased. What I do know is that even if I eventually get it, after paying the maximum amount of possible social security tax for over 10 years already, and expecting that to continue, the benefit according to the statements I get every year from social security will only cover about 20% of my current income. That's partly because only a portion of my income is taxed by social security, and partly because the benefits suck. I am sure hoping I will be alive in 2038 or 2043, and my doc tells me HIV probably won't kill me. I think I can count on that prediction a lot more than social security covering my needs at those dates. Or most of the planet not being underwater due to global warming .

My retirement plan has been mostly based around my 401k so far. Pre-HIV it was the only vehicle I used for saving. I opened a 401k when I was 19, and I have been contributing ever since. I turned HIV+ at 30. I am now 32. I have been contributing up to the legal maximum ever since I could afford it which is about 10 years ago. Right now, the total balance in my 401k is less than the sum of all my individual and employer contributions for the past 12.5 years. I should have stuck everything under the mattress instead - I would have done better ! However, I'm still young and I still contribute to it up to the legal maximum, mostly because I'm in a high tax bracket and saving after-tax is more difficult than pre-tax. It's sure been hard looking at the daily 401k balance these past few weeks, but I'm not changing anything to my strategy.

The 401k is great if you retire at the age of 59 1/2, but if you want to retire earlier than that (and for me, that's at about 50, since I started working at 19 - I think working for 31 years is enough), you get penalized, unless social security considers you disabled. But if you are disabled it wouldn't be a very fun retirement, would it ? So, I opened an extra taxable mutual fund account at the beginning of this year. I hope over an 18 year period that the result will be good. It's already down quite a bit. But I sure hope it will be better than the net negative return on my 12.5 year 401k.

The other things to look at in conjunction with your retirement are your company benefits. In particular health insurance and life insurance. My employer gave me the option of having 5.5x salary in life insurance without medical exam when I started. I left the company in 2006 and found out about my HIV diagnosis during my last week. I converted the life insurance policy to an individual one, and I still have it. It's got a very decent rate. It's with AIG - I'm sure glad the government bailed them out !

After my HIV diagnosis, my new employer only offered up to 2x salary in life insurance (it was worse than that actually, 2x salary with a cap, which I exceeded by a lot). After they denied my FMLA and fired me 3 months later while on disability for depression,  I got a quote from HR to convert the life insurance policy to an individual one - $10,000 a year fixed rate for life, with the Hartford ! Needless to say I did not convert that one. I went back to my old employer a couple months later, they again offered me a 5.5x salary life insurance policy - no medical exam or questions asked when electing at time of hiring. So now I have about 11x salary in life insurance coverage. If anyone with HIV is lacking life insurance and still working, I highly recommend job-hopping - that is a great way to legally increase your coverage amount. Of course the group rate I get currently with my employer is much lower than the old policy I converted to individual. One nice thing about having a lot of life insurance is that if your medical condition worsens over time, and you want to stop working even if you are not fully disabled according to social security, you can still leave the company voluntarily, convert the life insurance policy to an individual one within 30 days, and then sell that life insurance policy. You won't get the full amount of your coverage doing that, but you may not need the full amount either. And if you have multiple life insurance policies from different employers, you could sell one and keep another. If you pay for the life insurance premium after-tax, then the benefits are not taxed, so it's a very good deal.

Of course how to pay for healthcare is a big concern when retiring. With your 11 year retirement horizon, or my 18 year retirement horizon, a lot is likely to change in how healthcare is paid for. If I was retiring today, I can tell you what I would do - go on COBRA until it expires, then get a HIPAA policy. But both those options will probably change by the time either of us gets to retire.

[LordBerners]

...My official social security full retirement date would be at age 67 in 2043, and first possible retirement date at 62 in 2038. Most experts say the social security will either go bankrupt by then, or the benefits will be reduced, or social security taxes will increased.

Don't worry, most of the 'experts' claiming Social Security will 'go bankrupt' are just right-wing critics of the system.  In fact it will be fine - sure taxes will be increased (right now incomes above $90,000 or so are totally exempt - how bizarre is that?), and retirement age may go up a bit, but the program will still be there.

As for myself I never think about retirement.  To be honest I find it difficult to make it to the end of the month, and I fear hiv medications that I am currently taking could become unavailable to me in the future due to destitution and lack of any insurance.  Thus I have to admit I never envision a hypothetical situation where I am 62 or older!

[mecch]

A year ago I dumped my longterm partner, divided the goods, and spent scads of money rebuying stuff to rebuild my life.  I had wanted to buy into a IRA equivalent in my country with that money. It was pretty depressing.  Then this may I seroconverted and then was told that I have no natural ability to fight the virus, and went on meds.  It was kinda ironic cause of course I thought, oh well, I guess I dont have to be depressed about being poor when I retire, because I'll die before that. Now of course I am getting used to being HIV+ and being on treatment and reading stories about seniors with HIV and how they are retiring, so I guess I'll have to deal with this again.

All by way of saying, frankly, I have decided that the best solution is for me to find a very clever accountant who knows about such matters (retirement and tax advantages of IRAs, etc.) and let him/her advise me what to do.  Because I need an expert's cold, neutral knowledge and advice. 

Retirement planning seems to fraught with emotion and fear for me personally to have clear judgement.  But seems like I have to do something concrete.

Well that's my two cents.

[madbrain]

Hi,

Don't worry, most of the 'experts' claiming Social Security will 'go bankrupt' are just right-wing critics of the system.

I am not saying social security will go bankrupt, just that the system will not go unchanged for the next 35 years. Of course Congress is not going to let it disappear. But something will change, whether it's the benefit amount, the tax rate, how much and what type of income is taxed, or the retirement age.

In fact it will be fine - sure taxes will be increased (right now incomes above $90,000 or so are totally exempt - how bizarre is that?), and retirement age may go up a bit, but the program will still be there.

Actually, the amount of taxable wages for social security is going up every year - by quite a bit more than average wages or consumer price inflation are. It stands at $102,000 for 2008. And I agree it doesn't make any sense for the income above that not to be taxed. But one of the major problems with this tax cap is that the benefits are capped also. People with above average income need to retire and replace their income too. Right now, they are forced to do it with private retirement plans, because SS does not provide the needed retirement benefits.

Another thing that doesn't make any sense is that only wage income is taxed by social security - other types of income, such as capital gains, are not taxed. This simply encourages people to stop being wage earners so they can opt out of the system. I don't think a retirement system can work out if it is not mandatory. In France they put in such a tax on all income types called CSG ("contribution sociale generalisee") about 20 years ago. There is another tax called RDS that they put in more recently.

I would classify pushing the retirement age higher a benefit reduction. And a major one for those of us whose diseases may reduce life expectancy.

I'm still glad SS is there in case I get disabled. But I'm very unhappy about the way the retirement part of social security works, or the survivor benefits part of social security.

[madbrain]

mecch,

It was kinda ironic cause of course I thought, oh well, I guess I dont have to be depressed about being poor when I retire, because I'll die before that.

Despite controlling the virus naturally so far, I had the same thought after I seroconverted. It took me a good year to accept that HIV probably wasn't going to affect my retirement plan because the meds will be here for me when I need them and should last long enough to allow me to retire.

Now of course I am getting used to being HIV+ and being on treatment and reading stories about seniors with HIV and how they are retiring, so I guess I'll have to deal with this again.

In the 1980s and early 1990s, before the current HAART was available, many people with HIV and AIDS made financial decisions to put themselves into debt because they didn't think they had much time left to live. Many were right, but others survived and are now suffering from those decisions as a result as much as the virus. I don't think it's something we need to repeat now with the current treatments - unless perhaps you are resistant to every single drug out there.

All by way of saying, frankly, I have decided that the best solution is for me to find a very clever accountant who knows about such matters (retirement and tax advantages of IRAs, etc.) and let him/her advise me what to do.  Because I need an expert's cold, neutral knowledge and advice. 

Retirement planning seems to fraught with emotion and fear for me personally to have clear judgement.  But seems like I have to do something concrete.

Well that's my two cents.

What country are you in ? I agree that expert advice can help.
After my HIV diagnosis I looked for resources about financial advice for people with HIV and AIDS, but almost everything I found was pre-HAART and very outdated.
I am more of a do-it-yourselfer when it comes to finances.